“There’s a sense that a lot of mining deals are unfair and that companies have not paid enough in taxes,” said Thomas Lassourd, an analyst at the New York-based Natural Resource Governance Institute, which advises governments on mining policy. “The need to make such payments is often seen as a fair way to address that.”

Of greater concern, is that some settlements lack transparency, raising concerns about how the funds will be disbursed.

If companies are going to make such payments, they need to show “they have appropriate checks and balances in place to avoid misappropriate uses”, said Christine Chow, a director at Hermes Investment Management. “Any financial settlement or payments, therefore, should tie to the expectations that local communities…